Wednesday, January 23, 2013

Alliance for a More Expensive Minnesota

When we ponder the machinations in St. Paul, it's good to remember what Mencken said:

Democracy is the theory that the common people know what they want, and deserve to get it good and hard. 

Back in November, the good people of Minnesota accepted the notion that DFL governance would lead to, as we've heard, a "better Minnesota." So yesterday we got a look at how it's gonna be now that we have a Better Minnesota. And it won't be cheap:

[Governor] Dayton, who campaigned in 2010 calling for the state to "tax the rich," would create a new tax rate of 9.85 percent, to be paid on taxable income above $250,000 for joint filers and above $150,000 for single filers. That would net about $1 billion from 53,000 returns and give the state one of the top five top rates in the country.

For the first time, Minnesotans would pay sales tax on clothing -- items above $100 -- and on services like haircuts, auto repairs and legal fees.
Cheap? No. Good and hard? Mais oui. And if you're lucky enough to live in the metro area, there's more, because we hafta pay for the choo-choos:
The seven-county metro area would pay an extra 0.25 percent sales tax for improved transit -- a measure local business groups have supported. He also would increase spending on economic development by $86 million.
Presumably, the "local business groups" aren't located along University Avenue.

There's a boatload of tinkering involved in this proposal, which raises taxes in some places and supposedly lowers them in others. The big savings, supposedly, is in property taxes, where a $500 rebate is in the offing. Notice, however, that it's a rebate, not a permanent reduction in the rates. Rebates can be taken away at any time. And don't be surprised when the solons say, oh, darn the luck, we have a budget deficit, so we'll need to suspend that rebate.

Not surprisingly, the Republicans in St. Paul pointed out that the increased taxes are going to get passed on:
"I don't know how you can say you're going to collect $2 billion more in sales tax and not have the people of the state pay that," said Senate Minority Leader David Hann, R-Eden Prairie. "If you go out and get an oil change on your car, you're going to pay a sales tax on it. If you go out and get a haircut, you're going to pay a sales tax. If you join a health club. Those are things you are not paying sales tax on now."
All true. And there's this important point:
“We are going to raise two billion dollars in sales taxes but nobody’s going to pay them?” he asked. “How does that work? So the businesses are going to be absorbing these taxes and what is going to happen? It’s not going to pass them to ordinary people and consumers?  So, of course, people are going to pay.”
Yep. Enjoy your Better Minnesota, people.


Anonymous said...

How can a sales tax not be passed on to the consumer? Government is a greedy monster that apparently must be fed. The problem that we face in this country is that we have multiple layers of entities who have multiple appetites. These appetities must be fed by one group of taxpayers. Bigger Government demand particularly in a down economy means less money left for the taxpayer. And that my friends is getting it good and hard. Rewards for the loafers and cronies, and the shaft for everyone else.

CousinDan 54915 said...

Time to buy some land options in Wisconsin--Hudson, River Falls, etc.
Will the choo choo run to Stillwater?

Bike Bubba said...

Now I'm not terribly against a sales tax on clothing, but it should be noted that to get a decemt suit for interviewing, or a good pair of shoes to go with the suit, you're almost certain to go above that $100 threshold. Even a decent men's dress shirt can get to that level.

In short, another incentive for Minnesotans to adopt behaviors that lead to joblessness.

Worse yet, a good quality coat for this "winter" thing we have here goes for more than $100, too. So Governor JimBeam is also creating another incentive for people to sit inside and watch TV.

Which will cost us FAR more in the next ten years than sales tax revenue will generate.

Bike Bubba said...

Dayton's budget isn't half bad if you divide most of his planned increases in two, matching inflation rates. And then you can get rid of the tax hikes.

Gino said...

during my visit to MN, i had realized that i left mt tie behind and had to run to Kohls to get one for the occassion.
i was shocked when i paid the price on the tag, and no sales tax.

that said, i'm really looking forward to seeing a better MN when i arrive again, and i will arrive again, hopefully sooner than later.

Mr. D said...

that said, i'm really looking forward to seeing a better MN when i arrive again, and i will arrive again, hopefully sooner than later.

Minnesota is better when you're here, good sir.

Gino said...

it will be better when i can stay longer.
better for me, anyway...